Toward a Renewables-Driven Industrial Landscape: Evidence on investment decisions in the Chemical and Steel Sectors

Renewable hydrogen can decarbonize energy-intensive industries like chemicals and steel. This article demonstrates that this shift will likely alter the geography of climate-friendly industrial production. Prior theoretical debates suggest a “renewables pull effect,” where industries relocate to areas with high renewable energy potential. This study provides empirical evidence from a survey of managers at the 50 largest chemical and steel companies worldwide. The results indicate that renewable energy potential will drive locational investment decisions in these sectors by 2050. Additionally, the paper examines the role of industrial policy frameworks and geopolitical developments in these investment decisions, analyzing sectoral and regional specifics. The findings contribute to academic debates on the geopolitics of decarbonization and are relevant to industry and policy decision-makers involved in industrial decarbonization.